Student grants replaced by loans

Students starting university courses in England will no longer be able to apply for grants towards living costs.

Under changes that came into effect on Monday, grants for students from low-income homes are replaced by loans.

Previously, students from families with annual incomes of £25,000 or less received a full grant of £3,387 a year.

The National Union of Students said the move was “disgraceful” and meant poorer students would be saddled with a lifetime of debt.

The switch from grants to maintenance loans was announced in July 2015 by the then Chancellor, George Osborne, in his Budget.

Mr Osborne said at the time that there was a “basic unfairness in asking taxpayers to fund grants for people who are likely to earn a lot more than them”.

Speaking in January, the then Universities and Science Minister, Jo Johnson, said the maintenance grant change “helps balance the need to ensure that affordability is not a barrier to higher education, while ensuring that higher education is funded in a fair and sustainable way”.

NUS vice-president Sorana Vieru told BBC Breakfast: “It’s a disgraceful change that basically punishes poorer students simply for being poor, so they have to take a bigger loan than those students from privileged backgrounds.

“It could put off students from underprivileged backgrounds from applying, who might not understand how the loan system works, or are very debt-averse.

“We also know that mature students are way more debt-averse than younger students and BME [black and minority ethnic] students perceive student debt on a par with commercial debt.”

The change in funding comes as a report questions politicians’ assertions that having a degree leads to higher earnings.

The report, by the Intergenerational Foundation lobby group, says having to pay back student debts will wipe out any graduate premium for most professions.

The government says going to university boosts employability and earnings.